City Agency Audit Reports

Audit Report on the Department of Finance’s Efforts to Collect Outstanding Parking Fines from Participants in Its Stipulated Fine and Commercial Abatement Programs

Audit Number: FM11-110A
Release Date: October 18, 2012

AUDIT REPORT IN BRIEF

Introduction

The New York City Department of Finance (DOF) is responsible for the adjudication and collection of parking violations summonses issued by various authorized agencies. DOF has several programs to make it easier for commercial vehicle owners to save time and money resolving parking summonses. One such program is the Commercial Fleet Program, which was created to help commercial vehicle owners track and manage their violations. A company with one or more vehicles registered or leased under the company’s name and address is eligible to participate in the Commercial Fleet Program.

The Commercial Fleet Program follows the provisions contained in Chapter 39 of Title 19 of the Official Compilation of Rules of the City of New York (RCNY). The Commissioner of DOF adopted RCNY to prescribe the internal procedures and organization of the Parking Violations Bureau, the manner and time of entering pleas, the conduct of hearings, and the amount and manner of payment of penalties.

The Commercial Fleet Program includes two alternative programs, the NYC Delivery Solutions (Stipulated Fine) Program and the Commercial Abatement Program. Both of these programs allow participants to pay a reduced parking fine in exchange for waiving their rights to contest parking summonses and making their payments within 15 days.1 In addition to reduced fines, outstanding balances of Program participants are not assessed penalties or interest, their vehicles are not subject to tow, and DOF does not pursue judgments against participants for unpaid summonses.2 Both programs require their participants to pay off all outstanding summonses issued before they enter into the Program. However, the amount they pay is based upon a pre-determined reduced rate for each type of violation and they may enter into a payment agreement. (The one exception is for summonses issued for red-light violations, which are not reduced and are subject to judgment enforcement.) As of April 2012, there were 924 companies with outstanding fine amounts totaling $7,729,458 registered in the Stipulated Fine Program and 593 companies with outstanding fine amounts totaling $1,533,086 registered in the Commercial Abatement Program.

Audit Findings and Conclusions

DOF does not effectively pursue collection of outstanding fines for parking summonses issued to vehicles owned by companies participating in its Stipulated Fine and Commercial Abatement Programs. Further, companies were also allowed to continue in the Programs even after failing to pay for summonses issued prior to enrollment. In some cases, companies agreed to pay summonses when they entered the Program, made one partial payment, and then failed to make any further payments. DOF has no procedures on how to deal with non-compliant participants. DOF’s pursuit of this debt is non-existent. As of April 2012, 1,517 companies participating in these reduced fine Programs owe $9,262,544. However, if DOF were to adhere to the signed enrollment agreement and exercise its right to remove the non-compliant participants from the Programs, unpaid summonses could be restored to the original amounts and DOF could seek judgments and pursue all enforcement efforts against those companies with outstanding balances.

Audit Recommendations DOF should:

  • Revise its Weekly Fleet Summons Issuance Report to include all (not just newly issued) outstanding summonses sent to participants.
  • Closely monitor Program participants’ debt to ensure their compliance with Programs’ policies.
  • Establish formal written policies of enforcement actions to be taken against non-compliant companies, such as:
    • Implement enhanced notification efforts of any participant that does not pay all outstanding summonses listed on the Weekly Fleet Summons Issuance Report;
    • Set criteria to remove non-compliant companies from the Programs (i.e., set a monetary threshold or specify payment deadlines); and
    • Institute penalties and/or late fees for untimely payments.
  • Remove companies that are not abiding by the terms of their enrollment agreement and restore the summonses to the unreduced amount. Then pursue collection of restored summonses through default judgment in the amount of the original unreduced fine amount and impose all penalties and interest in accordance with the RCNY, §39-03.1.

Agency Response DOF, in its response, has in substance agreed to implement our four recommendations. While there may be a disagreement over what has occurred and when, there is agreement over the appropriate course of action to take in improving the effectiveness of DOF in collecting unpaid fines.

1. Effective February 15, 2012, companies enrolling in the Programs have up to 30 days to pay their outstanding parking summonses.
2. DOF has the statutory authority to docket an unpaid summons as a judgment, by default, in the records of the Civil Court of the City of New York. DOF may then restrain bank accounts, prevent license renewals of current registrations, and boot, tow, and auction off any of the debtor’s motor vehicles.